Working Capital Is Equal To

question 89

Multiple Choice

Working capital is equal to:

• A) Current assets.
• B) Current liabilities.
• C) Current assets plus current liabilities.
• D) Current assets minus current liabilities.

---

Definitions:

Intercompany Comparisons

Intercompany comparisons involve analyzing and evaluating the financial performance and strategies of different entities within the same group or company to identify discrepancies and opportunities for optimization.

Vertical Analysis

A financial analysis method that compares line item amounts on a financial statement to a base figure to determine each item’s relative size or contribution to the whole.

Liquidity Test

A financial analysis conducted to determine a company's ability to pay off its short-term liabilities with its liquid assets.

Acid-Test Ratio

A financial measurement that evaluates a company's ability to pay off its current liabilities with its most liquid assets.